Should Kathleen Kennedy be fired from Disney?
I’ve seen many, many YouTubers commenting on this very topic. In fact, this topic has had so many commentary videos, it’s probably consuming at least 10% of YouTube’s traffic. Just take a look for yourself. Anyway, because this topic is so widely being discussed, let me take the time to write an article here that describes most likely why she hasn’t yet been fired.
Contracts and Obligations
The biggest elephant in the room is also the most obvious, contractual obligations. It’s clear that most YouTubers really don’t understand the business of hiring executives. Executive leaders are always hired under contract. Contracts require both parties to fulfill their obligations as listed within the contract. It’s how employment contracts work.
However, there’s a snag here. Disney didn’t hire Kathleen Kennedy directly. Ms. Kennedy was already an employee of LucasFilm when Disney acquired the LucasFilm property… and this is the snag.
LucasFilm hired Kathleen Kennedy before the purchase took place. This meant that Kathleen was brought on board to Disney as an existing executive of LucasFilm. Why is this important?
Two Contracts
There are actually two contracts at play here with regards to Kathleen’s employment under LucasFilm.
- The 2012 $4 billion George Lucas and Disney buyout contract
- Kathleen Kennedy’s own employment contract with LucasFilm
In fact, it’s important to understand that George likely put Kathleen in charge of LucasFilm for the expressed intent of keeping the property sane after Disney purchased it. With that goal in mind, it’s very likely that LucasFilm hired Kathleen into a very long (and open ended) employment contract. What that means is that it is likely Kathleen’s choice whether the contract continues. As long as terms are written into the contract that allow this, Kathleen can remain at LucasFilm possibly for as long as she wishes.
The second side of this is the purchase contract. If George was smart enough to hire Kathleen for a very long stay at LucasFilm under Disney, then he likely also included provisions for her to stay employed for a specified period of time within the purchase contract also.
To do this, he likely wrote in a poison pill rider… probably written into both Kathleen’s employment contract and into the purchase agreement.
Putting this all together
With two contracts reinforcing each other, that means that should one or the other be breached, both contracts then fail to meet their obligations… which means that both contracts are breached and then outs for the contracts apply.
For the purchase contract, that could mean that the LucasFilm property (and any new work under it) reverts to ownership by George. This is a pretty big poison pill rider. I wouldn’t put this one past George. Not only would he get to walk away with $4 billion from Disney, he could also walk away with LucasFilm also. I’m pretty sure Disney wouldn’t find that poison pill attractive.
With Ms. Kennedy’s contract breached, Disney would likely have to pay her out a hefty golden parachute. A golden parachute rider requires the employer to pay out a huge sum of money upon failure to live up to contractual obligations. Because it’s very possible that both contracts are legally bound together, this means Disney is being held over a barrel with Kathleen Kennedy.
Not only might LucasFilm return to ownership under George, Kathleen may also get a huge payout (perhaps millions of dollars) if Disney fires her. It’s a very tough poison pill, but one I could easily see George requiring.
In other words, Disney can’t fire her. Should Disney fire her, both contracts dissolve and then penalties from both contracts apply against Disney.
Legal Obligations
Because contracts are very specific, should Kathleen personally breach the terms of her LucasFilm employment contract, then Disney may have cause to fire her.
Unfortunately, George probably wrote extremely loose and favorable terms for Kathleen and extremely unfavorable terms for LucasFilm into her employment contract intentionally. He did this knowing he would soon be selling LucasFilm to Disney. That means that Disney is in a very unfavorable situation with Kathleen. It means that Disney likely can’t fire her without a whole lot of legal things happening all at once.
Kathleen can breach the terms of her contract by doing something illegal. For example, if she’s accused and found guilty of inappropriate sexual misconduct, almost every employment contract allows releasing executives for breaking laws. That means Kathleen would need to violate laws for Disney to release her without Disney breaking any other terms of any other contracts.
Even then, George might still attempt to recover LucasFilm citing a breached purchase agreement.
Disney and Agreements
Disney likely agreed to the terms of both agreements more or less because they didn’t have a choice if they wanted LucasFilm. To get LucasFilm, they not only had to agree to the terms in the purchase agreement, they also had to agree with Kathleen’s employment terms as part of acquiring LucasFilm.
Kathleen’s Tenure
There could be an end in sight to Kathleen’s employment contract. It seems that in 2012, George may have set her employment terms to 6 years with the ability to extend. In 2018 and according to the Hollywood Reporter, she exercised her right to extend her employment contract and extended it by 3 years to 2021.
In 2021, Disney and Kathleen would again renegotiate her LucasFilm contract, which (depending on contract terms) could allow Disney to rewrite her contract to Disney favorable terms, place her directly under Disney and get rid of any poison pill riders in the process. A new employment contract would then allow Disney to fire her with impunity. Extending an existing contract doesn’t get rid of any poison pill riders.
It is entirely possible that Kathleen can extend her employment contract indefinitely with LucasFilm. However, it’s also possible that George did put a hard date limit on the type and number of extensions. Once her ability to extend ends, she will be required to strike up a new contract with Disney directly and those contract terms won’t be as favorable to her situation.
However, Disney could choose not to renew her contract at all and allow it to expire… at which point Disney could dismiss her. However, the unfavorable terms in the purchase contract could prevent that. It depends on what was written into the purchase agreement terms.
If George placed a timer on the purchase terms such that Disney can’t dismiss Kathleen while that timer is in place, then that means Disney must extend her contract until that purchase agreement timer runs out.
A contract timer works like this. The purchaser must remain in good faith under the terms of the agreement for a specified period of time, such as 10 years. The good faith part may include a bunch of agreed upon stipulations, such as keeping certain people employed during that period of time. If any of the stipulations are breached, the good faith terms no longer apply and the contract is considered breached.
What this means for Disney is that George Lucas could reacquire ownership of LucasFilm if Disney breaches these timer’s terms… and that is contingent on Kathleen’s employment contract. Even if Kathleen’s contract expires, Disney may be forced to craft a brand new contract to continue to employ her until the purchase agreement timer expires.
If Disney, again, extends her contract in 2021 for another 3 years, then this timer situation is likely the case. They can’t afford to lose LucasFilm and let it revert back to George Lucas ownership… and on top of this, pay Kathleen a huge sum of money from her Golden Parachute. Not only does that give George Lucas a potful of money, he also gets his former property back with new films in the portfolio to boot and Kathleen gets even more money.
Disney’s Response
Basically, a situation like what I surmise above (while a bit legally convoluted) may very well exist between George, Kathleen and Disney. Contractual terms can sometimes be unwieldy beasts and no side wants to breach those terms, particularly when looking at the downsides.
If any of what I suggest actually legally exists, this is why Kathleen Kennedy is still employed at LucasFilm cum Disney and cannot be fired. That doesn’t mean Disney can’t sideline her or take her off projects because these things may not be specified on the contracts, but those specifics which are in the contracts must be adhered to.
Only Disney, Kathleen, George and all of the lawyers involved understand the minute details of both the purchase contract and Kathleen’s LucasFilm employment contract (and how they both interrelate).
YouTubers
I get why YouTubers rail on Ms. Kennedy. I get why they want her fired. I get why they produce their videos stating all of this. However, these naïve YouTubers really don’t understand business or contractual obligations in the business world, particularly when it comes to executives and acquisitions.
While fans can continually call for Kathleen to be fired over her handling of the Star Wars property, it’s very unlikely to happen while contractual obligations are still in play. Kathleen herself would be stupid not to sit back and let the money roll in while she pretends to do a job for Disney. With such convoluted contracts, Kathleen is sitting pretty no matter what she does… short of breaking the law. She can completely turn LucasFilm and Star Wars inside out and pretty much Disney can do little to stop her, at least until any timers expire.
Once Ms. Kennedy understood the extremely favorable situation (if similar to what’s described above) that George arranged for her, she could pretty much torch Star Wars and Disney couldn’t really do anything about it. What Kathleen has done for Star Wars isn’t at all pretty. But, it’s not illegal and it’s possible there’s very little Disney can do to kick her out of the organization. Granted, she has turned a tidy sum for Disney, at least for the latest trilogy films, even as bad as they are. Disney can’t fault her for not making Disney money. As a result, Kathleen is likely still living up to her end of the employment agreement with LucasFilm.
Should Disney fire Kathleen Kennedy?
As long as unfavorable contractual obligations exist for Disney, no. Disney and Disney’s lawyers fully understand the ramifications of firing her. Until they can fire her without tripping contractual clauses, they’re going to let her sit in her comfy Disney office, using her comfy Disney chair pretending like she knows what the hell she’s doing.
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Careful what you say
This story is about a co-worker at a previous job. I won’t name any real names or the company or describe him in detail, but I will explain the situation, which is most important for this article. Let’s explore.
Flowery Explicit Language
I’ve worked at various Internet companies and occasionally I run into co-workers who choose to use flowery explicit language while at work. In most cases, that language is a form of expression, usually reserved for exasperating circumstances. You know, when something goes wrong and you might yell, “shit”.
Well, a particular co-worker, let’s call him ‘J’, used this language casually and at all times. I thought it a bit odd, because I’d never met someone who did it so often and so casually in a professional workplace, particularly as loudly as he did it.
Before I go any further, I’ll explain that J wasn’t a native English speaker. He also wasn’t American. I had personally attributed his tactlessness, loudness and language to his personal nature (read: upbringing). With that said, I’ve met many people of J’s nationality and many of this nationality worked at this particular company. By and large, most of the people I’ve met of his nationality were cool and collected. They didn’t use such language at all (or very, very rarely). However, J had a mouth on him like you might expect on, well let’s just say on someone “low class”. It was particularly surprising to hear this language from someone in his situation (no green card, needing sponsorship, here on a work visa) and position. His language was always a bit like “Throwing caution to the wind”, in other words, risky. I always felt that he should have been a bit more cautious considering his personal work circumstance and that the workplace staff didn’t often use this kind of language. It was an odd mix for J, but apparently he was set in his ways.
I even politely commented that he should reserve these colorful expressions to more appropriate times rather than using them all of the time. I even told him he should be careful when using these expressions around the office as it’s likely to get him into trouble… and so begins this story.
Reading Your Environment
I’ll take a brief detour before continuing on with my story. When you hire onto a workplace, you should always go into observation mode for at least a couple of weeks. This observation period allows you to “read” your environment and understand what is considered acceptable and what isn’t. You don’t come in with mouth ablazin’ shooting off all manner of colorful expressions. Instead, you learn to read the staff, the behaviors and the acceptability of that kind of expression.
Some businesses have managers who are very verbally expressive with expletives. Some businesses do not. Reading the environment is the only way to determine if such behavior is considered ‘normal’ at that place of business. In general, it’s not typically considered professional or acceptable language and you should always choose not to use colorful expressions at all. However, if you find your manager uses them at times, then it’s not off to use them yourself if you’re so inclined. Your manager probably won’t even care if he/she also uses expletives.
Unfortunately, certain employees don’t understand this concept of “reading your environment” when they begin new employment. J was one of these folks and remained completely oblivious. Let’s continue with this story…
Executive Bailout
Our company had had a particularly successful last 18 months. However, all good things must come to an end, and so it did. First, the CEO announces his departure. Then, a number of other executives also announce their departures. An interim CEO is named and he takes over as CEO immediately after the other CEO announces.
My team was led by an executive VP who, at the time, had been simply going through the motions for the last 12-18 months. At first, this executive was highly motivated, on-board, and extremely engaged with everything and everyone. By the last 18 months, he had more or less checked-out. He no longer kept up with the day-to-day operations, he didn’t really much care how the department operated (other than not wanting to see it melt down, of course) and he no longer took an interest in the team. He was simply disengaged and “going through the motions”. I saw it and so did everyone else. So, it wasn’t a surprise what happened next.
Mandatory Meeting
We were called, as a department, to a large open presenting space in the lobby of our company’s building. At the time, we had no idea as to the reason for this impromptu “all hands” meeting, but I had my suspicions as to what was coming as we had had many of these in the last few weeks. I didn’t make any snap judgements as we had also had some of these meetings that simply ended up new product announcements, rah-rah sessions or other random weird (and unnecessary) company “all hands” announcements.
As I showed up a bit early, I was able to get a seat. Unfortunately, not so with everyone who showed up later. In fact, by the time the presentation started, it was standing room only and many were standing around the entire perimeter of the room, including in front of the two main double doors. For an impromptu meeting, it was really the only large-ish space the company had and it was well overfilled.
Anyway, the room fell silent and the executive who was disengaged took the stage and began explaining that he would be departing. No surprise there. After a few rah-rah type statements from him to try and keep the team motivated, the interim CEO took the stage, announced this now-departing executive’s replacement and began well wishing and additional rah-rah messages.
After it is all over (about 15 minutes later), we exit the room and head back to our desks to continue with our day on that news. The meeting had convened early, around 9AM… so we had a full day of work ahead on that “exciting” news. On the way back to our desks, I spoke with J in the elevator. We had a quick conversation about this executive’s departure and he was, as usual, using his standard flowery expressions in the elevator. Since we all knew one another, nothing here was a surprise. I even had a few more conversations with J before the end of the day about meeting up tomorrow and at this week’s wine event. At this point, nothing seemed out of the ordinary (other than this latest executive’s departure news).
Surprising News
On the following day, I noticed that J was no where to be found. He wasn’t at his desk. I needed to talk to him about a project we had both been working on. Because my direct boss was also his boss, I asked my boss where he was. I was told he was no longer with the company. That was a surprise much more than the disengaged executive’s departure.
I was a little bit in shock. My boss offered no additional explanation other than he was no longer with the company. It was an abrupt change that I didn’t see coming… at least, not at that moment. Usually when staff are let go, there’s a process… typically involving a probationary period. I didn’t think that J was currently on any kind of probation or performance plan. Even though he did rub a lot of people the wrong way, it didn’t really much seem to affect his job. At least, the people in my department were tolerant of his behavior, and had grown accustomed to it. It was definitely a surprise at his departure.
In fact, my boss actually seemed surprised at the news when he told me. His voice and words implied to me that he had nothing to do with J’s departure. In other words, my boss’s tone and words told me he hadn’t fired J. Instead, something else had happened. This is where things get interesting…
The Full Story
We had a regularly scheduled after-hours wine event once every couple weeks where we could unwind, meet people from other departments, drink a little wine, snack and, of course, chat. This wine event was already scheduled a day or two after this disengaged executive departure announcement. This executive even attended briefly. In addition to consuming choice wines, obviously, we’d chat about whatever was on our minds (i.e., company gossip). As the wine took effect, so did the venting. Sometimes the conversation was about the office. Sometimes it was about world events. Today, we chatted about all of the departures, including J’s.
At this wine event, even though my boss had been extremely tight lipped, the beans were spilled as to exactly what happened with J by an attendee (not my boss). Here’s how the story went…
Let’s go back in time to the presentation…. As I was comfortably sitting in my seat awaiting the presentation to begin (probably working on my laptop), J was standing by the entry doors. He was apparently holding onto one of the door handles. The presentation starts and the disengaged executive begins his departure announcement.
At this point, someone opens the main entry doors where J is standing and holds the door open. Because there was some commotion outside in the echo-filled lobby preventing him from hearing the presentation, J, who gets irritated and triggered way too easily, chimes in and says, “Close the f*cking door, dumb*ss!” (or something very similar) rather loudly and without looking. He might have even said something more demeaning to the person, but this is what I had heard that he said.
Needless to say, the person holding the door open was none other than the brand spankin’ new interim CEO himself. At the time, the then CEO ignores the comment, enters the room, walks to the front and begins his speech. He finishes up and exits through the side door as if nothing happened.
Here’s where things get interesting. Immediately following the announcement, the CEO (and this is according to those at the wine event) walked over the HR to first identify J and then he requests J’s termination. J was gone the following day.
My boss told me none of this. Whether he knew the details, I have no idea. He wasn’t the one who told the story. This was from another person at this wine event who apparently had close ties to the HR person.
After speaking with J later, I had come to find J had no idea what went on or why he was fired. According to J, one day he was there, the next day he was gone. He doesn’t get it. Either he’s thick and can’t recall what he says or he’s feigning ignorance at what he did. I’ve spoken with J several times, even meeting at a restaurant for dinner, and he still doesn’t seem to get it. In fact, I’ve disclosed none of the details to him for fear he’d go do something stupid. He’s not only abrupt with his language, but he’s also a bit of a hothead with a temper. It’s also not really my place to tell him as I didn’t actually witness the event. I was sitting in my seat not watching the rest of the room. I’m getting this information from a third party. However, it does make perfect sense based on J’s personality.
The moral of this story is, if you’re at work, always use professional language at all times and …
Careful What You Say
If you’re thinking of using flowery explicit language (or you do already) at work, here’s an example where it can easily backfire. Everyone gets frustrated when things don’t go as planned. That’s to be expected.. and even a flowery phrase or two directed at the situation might even be expected, if not warranted. However, you should never direct flowery explicit expressions at anyone at your workplace, especially if you can’t see the person. You never know just whom you might have insulted.
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